| As long as you understand that, in order to achieve | | | | capital, Cairo. This market has attracted the attention |
| high returns, you need to take on a higher amount of | | | | of the largest developer in Dubai, Emaar, who are |
| risk, we have the perfect solution for you - Egypt. | | | | building several upmarket developments around Cairo. |
| When we first put the figures together for prices in | | | | While there are excellent rental returns available in |
| Egypt at the start of 2007, we thought that we had | | | | Cairo, you really do need to do a lot of research |
| made a mistake. Then beach-front property in either | | | | regarding the best locations in the market. You have |
| Hughada or Sharm el-Sheikh was still selling for just | | | | to remember that Cairo is one of the World's biggest |
| EUR600/m2. That was half the price of Turkey and | | | | conurbations - significantly larger than either London |
| 40% of similar property in Morocco. | | | | or Moscow, so make sure you pick the right area. |
| During 2007, prices have started rising fast for | | | | So, everything about Egypt sounds great, doesn't it? |
| top-end prime location properties as developers | | | | Low prices, high rental yields, rapidly increasing |
| realize that Egypt is a market with huge potential, | | | | demand - wonderful! But, be careful. High returns |
| and now there are some luxurious developments | | | | usually come with high risks and investing in Egypt is |
| with prices of over EUR1000/m2 in Sharm el-Sheikh. | | | | no exception. While Egypt has moved a long way in |
| But still the entry costs for Egypt are incredibly low | | | | order to develop its massive economy, the country |
| to all of the other markets that we cover on | | | | still has a lot of problems. Much of the country lives in |
| Propertastic! | | | | total poverty, there are many instances of human |
| The reason why property is so affordable here is | | | | rights abuse, and terrorism remains an ever-present |
| that it is only recently that the Egyptian Red Sea | | | | threat. The most serious instance of this was an |
| coast has taken off as a resort destination. But it has | | | | attack upon several hotels in Sharm el-Sheikh in 2005, |
| taken off fast now due to the fact that the season | | | | killing 88 people. |
| there lasts 365 days per year and the prices are | | | | Another factor to take into account is that Egypt |
| incredibly cheap, even when compared to Turkey. | | | | doesn't have to comply with EU Building Regulations |
| The great value that Egypt offers has made the | | | | and there have been reports of some very dodgy |
| country especially attractive to Russian and Eastern | | | | construction techniques being used in some |
| Europeans, with many charter flights coming into | | | | developments. You should consider getting a |
| Egypt from these destinations. Tourism from the UK | | | | surveyor's report done if you have any fears at all to |
| and Ireland is not yet so developed as Egypt is just | | | | save you a lot of grief down the line if the |
| a little too far for the budget airlines to be interested | | | | construction is sub-par. If you're buying off-plan, ask |
| in the market, meaning that it is relatively expensive | | | | the developer what guarantees they are willing to |
| to fly to Egypt from there, although there are an | | | | give on the property. |
| increasing number of charter flights to the Red Sea | | | | If you are buying existing properties, you really need |
| Resorts. | | | | to make sure that you work with a very good |
| Currently, here are two major resorts in Egypt - | | | | lawyer to ensure that you are buying exactly what |
| Sharm el-Sheik on the northern side of the Red Sea | | | | you think you are buying. Egypt's Land Registry |
| and Hurghada on the southern side. Sharm el-Sheik is | | | | system is messy to say the least and you could end |
| the newer of the two; Hurghada having been | | | | up with some very major and very expensive |
| established for longer. It looks as if Sharm el-Sheikh is | | | | problems down the line if there are any unresolved |
| going to be the more exclusive of the two resorts, | | | | ownership issues after contracts are signed and |
| which accounts for the fact that prices are already | | | | payments are made. |
| ahead of those in Hurghada, but this has to be | | | | You will also need the assistance of a lawyer in order |
| tempered with the additional security risk of Sharm | | | | to guide you through the process of registering the |
| el-Sheikh being that much closer to all of the Middle | | | | ownership of your property as there are two |
| Eastern troublespots. Another disadvantage to Sharm | | | | methods of doing this. The first method registers |
| el-Sheikh compared to Hurghada is that foreigners | | | | you as the owner in the Land Registry. The |
| are not allowed to buy property there on a freehold | | | | downside to this however is that, as a foreigner, you |
| basis - it has to be bought on a leasehold basis with a | | | | are restricted to the number of properties you are |
| maximum duration of 99 years. | | | | allowed to buy in Egypt and you will also be unable to |
| Although Sharm el-Sheikh and Hurghada are the two | | | | sell on the property in a period of less than five |
| locations that are currently seeing the majority of | | | | years. The second method, which is probably the |
| development on the Red Sea, it is inevitable that | | | | better of the two, is to register your ownership with |
| other resorts will start to take off, such as the | | | | a notary but not have your name listed at the Land |
| Zafarana Beach Resort, which is located 135km north | | | | Registry. This avoids the restrictions placed upon you |
| of Hurghada. | | | | as a foreigner. |
| If you are interested in buying property in Egypt, | | | | If you are naturally risk-averse, Egypt is probably not |
| then it is better to arrange financing back home or to | | | | for you and you would be better off investing in one |
| make a deal with a developer who is able to offer | | | | of the EU countries. But if you are more of a |
| full financing deals. While it is possible to obtain local | | | | speculative investor, or are building up a property |
| mortgages in Egyptian Pounds, the interest rate of | | | | portfolio across more than one country, then Egypt |
| 14% means that it is probably not going to be | | | | is definitely worth looking at in more detail. With |
| financially viable to finance in this way. | | | | prices so low at the moment, a 10% deposit on a |
| These high interest rates are good news for | | | | reasonably sized apartment in a prime location should |
| overseas investors in Egyptian property. It means | | | | cost you less than EUR5,000 in cash so, for most |
| that even some of the most affluent Egyptians are | | | | property investors, the amount of risk should be |
| unable to buy property themselves, meaning that | | | | relatively low. |
| they rent instead. This means that rental yields in the | | | | In summary, it's hard to find a better location in the |
| country are very high compared to other territories. | | | | World than Egypt at the moment if you are looking |
| An alternative to buying on the coast is to buy in the | | | | to make some serious medium-term gains. |